Sick pay shock as reclaim scheme disappears

One of the less trumpeted changes of the new tax year is causing consternation among some businesses, who have only discovered this week that they can no longer claim back statutory sick pay (SSP) disbursements from their payments to HMRC.

The most succinct official explanation came in Employer Bulletin 46 in February, which confirmed the percentage threshold scheme (PTS) for SSP would be dropped at the end of the 2013-14 tax year.

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Comments

What    1 thanks

0098087 | | Permalink

I love is the help for small businesses from this government. There is none. With auto enrolment and the fact that the regulator has basically said small businesses are on their own, it's a disgrace.

SSP

Lyndaw | | Permalink

They give with one hand and take away with another........

Options

richards1 | | Permalink

I wonder what the situation is about being able to alter contracts of employment without any penalty now that SSP has disappeared. i.e. that there is now n o sick pay at all.

SSP RECLAIM

philfromleeds | | Permalink

I feel their should be an insurance product available to employers to pay workers when they are off sick. The rules should be an employer can claim if his employee is off at least 2 weeks or a hospital sicknote advises refraining from work. 

stepurhan's picture

No contract change

stepurhan | | Permalink

richards1 wrote:
I wonder what the situation is about being able to alter contracts of employment without any penalty now that SSP has disappeared. i.e. that there is now n o sick pay at all.
The reclaim has disappeared. The requirement to pay SSP has not. There is no change of employment contracts.

daveforbes's picture

Great idea    5 thanks

daveforbes | | Permalink

philfromleeds wrote:

I feel their should be an insurance product available to employers to pay workers when they are off sick. The rules should be an employer can claim if his employee is off at least 2 weeks or a hospital sicknote advises refraining from work. 

... and this insurance scheme could be national, just got to think of a good name for it.  :-)

Health & Welfare System    2 thanks

nickselectaccounting | | Permalink

I have wrote to my MP, FSB & AAT about this. Not particularly in that order.

It is particularly interesting how the Health & Welfare Scheme is still at Tender stage and the DWP have yet to appoint a private firm in which to manage it. The Scheme may be up and running by late 2014.

Another cost for small employers in additional to flexible working hours that has kicked in on 01 April 2014.

Another cost for small employers in addition to Auto Enrolment that will really take full force in the next 12-18 months. Including increased staff costs, HR costs, Financial Advice Costs oh. . and Accountancy costs.

Considering Small business were portrayed as the bankbone of the UK economy, it is without fear of contradiction the the UK economy must be increasingly spineless. . .

 

A lot of unhappy voters are going to be voting with their feet this time next year. . . 

Great Idea    1 thanks

elaynam | | Permalink

I heartily agree there should be some mechanism that small employers could access but I dare say the cost would outweigh the benefits, insurance being the expense it is.  Let's just thank our lucky stars it is only SSP the government is not refunding to employers, and not SMP, SPP an not forgetting SAP.

We're all doomed.    1 thanks

SJH-ADVDIPMA | | Permalink

We're all doomed.

NO SSP RECLAIM    2 thanks

philfromleeds | | Permalink

The reason for this change is that it was believed by the government that the PTS gave employers an incentive not to encourage long term sick employees to return to the workplace. The government has wierd ideas. They are ruling by dividing the nation. They talk about hard working families and those out of work. I saw a Panorama programme about people earning in benefits far more than I, a wage. 

The problem is most of the benefits go to pay the rent to private landlords. We need more council homes that can not be bought. The right to buy a council house seemed a very nice idea but has led to a shortage of affordable homes  to rent. Labour should change the rules and councils should only sell homes if they are going to replace them. Also the large discounts should go out the window.

 Under these new arangement an employer who is making good money can afford to pay SSP or more, but an employer sho is struggling can not afford to pay SSP or less. The SSP system should be that if the employers profit plus directors remuneration is below a certain amount, then SSP can be reclaimed. It would be based on the previous year. There would ofcourse have to be other rules like profit per director or partner.

Back to homes, we must build more homes especially in London. There needs to be a well designed high rise block with play areas on certain floors and CCTV.

 

bankbone?

leon0001 | | Permalink

nickselectaccounting wrote:

I have wrote to my MP, FSB & AAT about this. Not particularly in that order.

It is particularly interesting how the Health & Welfare Scheme is still at Tender stage and the DWP have yet to appoint a private firm in which to manage it. The Scheme may be up and running by late 2014.

Another cost for small employers in additional to flexible working hours that has kicked in on 01 April 2014.

Another cost for small employers in addition to Auto Enrolment that will really take full force in the next 12-18 months. Including increased staff costs, HR costs, Financial Advice Costs oh. . and Accountancy costs.

Considering Small business were portrayed as the bankbone of the UK economy, it is without fear of contradiction the the UK economy must be increasingly spineless. . .

 

A lot of unhappy voters are going to be voting with their feet this time next year. . . 

 

I think you meant backbone... however, on second thoughts, bankbone is probably right!

Write to MP. Good luck. Ours

0098087 | | Permalink

Write to MP. Good luck. Ours is a waste of time. Only consolation is that UKIP may dent him enough to get him. Every Wednesday the PM says he's standing up for British business. Not sure where..

Ours is the one who came up

0098087 | | Permalink

Ours is the one who came up with no NI for 18-21 year olds. Great plan when there's a shortfall.

We didn't need auto enrolment. Should have lower rates NI for lower paid. Start at £50 a week and start taking NI. Stupid nonsense which is causing more problems.

How will the payment of SSP be enforced and by whom?

Isla | | Permalink

I manage the payroll for an employer who has 3 members of staff and contracts of employment stating that full pay will be paid for the first two weeks of sickness then half pay for the next two weeks in any calendar year.  If the employee has a period of sickness over these 4 weeks in a year they don't receive any pay.  Up to now he has paid SSP because it could be reclaimed, now that this is no longer an option he is just refusing to pay anything other than what it states on the contracts.  So can anyone tell me who is going to cover the SSP for employee's in this situation or who is going to force the employer to pay the SSP?  People in such a situation do need money to live on. One employee is going to be unable to work for several months because she is receiving treatment for cancer.  The employer just says he is not paying her, who is going to force him to make these payments?  He does not see compliance with employment law as a priority in any way and in general ignores it.  His employees are also required to use holidays to cover any sick leave or hospital appointments they have and any extended absence means the employee is not only unwell but does not get any holiday either.

It is all very well for the government to make the regulations but in reality there is no one to  ensure an employer such as this actually complies.  If any employee objects to anything he very forcefully manages them out the door for good.  There are countless numbers of employers like this and really in my experience they just do what they want.  The fact that I am telling him he has to pay this employee at least the rate of SSP for 28 weeks is something he assures me he intends to completely ignore.

Sick Pay Shock

airgeadagam | | Permalink

After having received my nice letter from Mr Cameron I thought it only fair that I write back to point this new development out to him in case he wasn't aware of it.

Poor me has had to take six months off work in the last two years and it was nice to know that I wasn't having to worry about finding money to pay my own sick pay while I was lying in the Beatson.

How will the payment of SSP be enforced and by whom?

sevin | | Permalink

Isla wrote:

I manage the payroll for an employer who has 3 members of staff and contracts of employment stating that full pay will be paid for the first two weeks of sickness then half pay for the next two weeks in any calendar year.  If the employee has a period of sickness over these 4 weeks in a year they don't receive any pay.  Up to now he has paid SSP because it could be reclaimed, now that this is no longer an option he is just refusing to pay anything other than what it states on the contracts.  So can anyone tell me who is going to cover the SSP for employee's in this situation or who is going to force the employer to pay the SSP?  People in such a situation do need money to live on. One employee is going to be unable to work for several months because she is receiving treatment for cancer.  The employer just says he is not paying her, who is going to force him to make these payments?  He does not see compliance with employment law as a priority in any way and in general ignores it.  His employees are also required to use holidays to cover any sick leave or hospital appointments they have and any extended absence means the employee is not only unwell but does not get any holiday either.

It is all very well for the government to make the regulations but in reality there is no one to  ensure an employer such as this actually complies.  If any employee objects to anything he very forcefully manages them out the door for good.  There are countless numbers of employers like this and really in my experience they just do what they want.  The fact that I am telling him he has to pay this employee at least the rate of SSP for 28 weeks is something he assures me he intends to completely ignore.

What makes this whole situation worse or certainly a detriment for the employee is he/she now has to pay the intial fees (upto £1200 ) to appeal to an Employment Law Tribunal thus giving even more power to this type of employer.  It appears that we may have entered an age of further employment law abuse simply because the goverment wants to have the whole cake and eat it themselves.  .

 

 

Insurance

Christine Marsh | | Permalink

There are insurances available to cover employee absences as we use one at a local Academy. Not sure of criteria or fees, but if employers are overly worried then they can investigate this route.
Doesn't negate the fact that if SSP is 'statutory' then government should cover the cost as it all seems to be falling on the employer.